441
104
of maintaining financial stability it was obviously his duty to take the necessary steps to impose the levy.
The statement in paragraph 10 that it was contrary to the Order in Council " for the Governor to take power "to tax any part of the Public Service "is unsupported by reference to any provision of the Order in Council.
In this connexion I would
invite reference to my observations in paragraphs 5 and 6 above on the joint statement forwarded by Sir Henry de Mel. I do not regard a reduction in the salaries of Public Servants in the manner provided as taxation in the ordinary sense of the term.
11. Method of Certification of the Two Ordinances.-In paragraphs 13 to 18 Mr. Perera raises a technical objection to the way in which the Governor's declaration under Article 22 of the Order in Council was made. I can find nothing in Article 22, or anywhere in the Order in Council, which requires the declaration to be made while A correct con- the Bill which is the subject of the declaration is before the Council. struction of Article 22 appears to indicate that the declaration can be made at any time, and in respect of any Bill which the Council is empowered to pass, provided it is made in one of the two ways prescribed.
Supplementary Estimates for Passages and Holiday Warrants.
12. In arguing that these Supplementary Estimates were not essential to give effect to the provisions of the Order in Council, Mr. Perera, like the signatories to the other statement, has completely ignored Article 87 (4), the effect of which I have indicated in paragraph 8 above.
13. In conclusion I might add that as regards the interpretation of the relevant provisions of the Order in Council I have acted throughout in closest consultation with the Attorney-General, Mr. E. St. J. Jackson, K.C., who is now on leave in the United Kingdom and should any further explanation be desired, I would suggest that he be consulted.
I have, &c.,
GRAEME THOMSON,
Governor.
105
2. In my message of the 9th February, 1932, informing the Council that I had assented to the Income Tax Ordinance, I indicated to the Council certain amendments of that Ordinance which I considered to be necessary, and I made a very full statement of my reasons for the opinions which I then expressed. I confidently expected that the State Council would have examined these reasons in detail and would have considered individually and on their merits the various proposals embodied in the Amending Bill which I caused to be introduced.
3. By rejecting the second reading of the Amending Bill the State Council pre- vented its consideration clause by clause. I feel entitled to express my sense of dis- appointinent that the Council should have rejected in this summary fashion the appeal which I made in my message above referred to.
4.
I am compelled by the responsibility placed on me by the Constitution to take steps in accordance with the provisions of the Order in Council to secure an amendment of Section 8 of the Income Tax Ordinance which will exempt from taxation the interest on all Ceylon Government loans raised before the date on which that Ordinance came into force. As I have already explained to the Council, it is the opinion of the Secretary of State that the imposition of Ceylon Income Tax on loans raised before the date of the Income Tax Ordinance would seriously prejudice the success of future issues of Ceylon loans.
5. I therefore declare under paragraph 1 (b) of Article 22 of the Ceylon (State Council) Order in Council, 1931, that the title, Clause 1 and Clause 5 (to be renumbered Clause 2) of the Bill to which this letter relates are of paramount importance.
6. I have decided, after consultation with the Secretary of State for the Colonies, that I must accept the decision of the State Council with regard to the other proposals embodied in the Amending Bill, viz., the proposals relative to the Board of Income Tax, the taxation of sums received in commutation of pension, appeals to the Board of Review and prosecutions by private persons.
7. I request that you will be so good as to convey this message to the State Council at its next meeting.
I have, &c.,
GRAEME THOMSON,
Governor.
SIR,
Enclosure 1 in No. 45.
Nuwara Eliya, 15th March, 1932.
I HAVE the honour to inform you that it has been reported to me that the State An Ordinance to enable a Council rejected the first reading of the Bill intituled temporary levy to be imposed on the salaries and wages of persons employed in the Public Service," which the Financial Secretary, acting by my authority and under my instructions, proposed on Thursday, the 25th February, under Article 22 of the Ceylon (State Council) Order in Council, 1931.
2. Having regard to the serious state of the finances of the Government, I feel obliged to take action under paragraph (1) (b) of the Article of the Order in Council quoted above, and accordingly I hereby declare this Bill to be a matter of paramount importance. I request you to inform the State Council at its next meeting that I have made this declaration.
The Honourable
The Speaker of the State Council.
SIR,
Enclosure 5 in No. 45.
I have, &c.,
GRAEME THOMSON,
Governor
Nuwara Eliya, 15th March, 1932.
I HAVE the honour to inform you that it has been reported to me that the State Council rejected the second reading of the Bill intituled "An Ordinance to amend the Income Tax Ordinance, 1932," which the Financial Secretary, acting by my authority and under my instructions, proposed on Friday, the 26th of February, 1932, under Article 22 of The Ceylon (State Council) Order in Council, 1931.”
The Honourable
The Speaker of the State Council.
Enclosure 6 in No. 45.
JOINT STATEMENT BY SIR HENRY DE MEL AND TWENTY-FOUR OTHER MEMBERS OF THE STATE COUNCIL SETTING OUT THEIR REASONS FOR OBJECTING TO THE DECLARATIONS MADE IN RESPECT OF THE ENABLING BILL AND THE VOTES FOR PASSAGES AND HOLIDAY WARRANTS.
C
Ar a meeting of the State Council in Executive Session held on 16th March, 1932, a message from the Governor to the Speaker was read declaring the Ordinance to enable a temporary levy to be imposed on the salaries and wages of persons employed in the Public Services" to be a matter of paramount importance under Article 22 (1) (b) of the Ceylon (State Council) Order in Council, 1931.
On the same day the Financial Secretary presented a Supplementary Estimate, under Head 26. Sub-head 4, for a sum of Rs. 250,000 for passages for officers, their wives, and families. On the rejection of this motion by the House, the Financial Secretary declared his motion that the Supplementary Estimate for Rs. 250,000 above mentioned be approved was essential to give effect to the provisions of the Ceylon (State Council) Örder in Council, 1931.
+
At the same meeting the Financial Secretary presented another Supplementary Estimate, under Head 26, Sub-head 5, for a sum of Rs. 470,000 (Holiday Warrants). As a large number of Members left the House at this stage there was no quorum. The motion could not be proceeded with and the House adjourned for the following day. On the 17th March, 1932, the motion was put to the House and rejected. The Financial Secretary thereupon declared that his motion "that the Supplementary Estimate be approved " was essential to give effect to the provisions of the Ceylon (State Council) Order in Council, 1931.
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